The Paramount Skydance-Warner Bros Discovery merger will create a combined entity that would have a net debt of about $79 billion. The company also rules out any plan to divest or spin off the cable assets. Paramount Chief Executive Officer David Ellison said that the companies will fold their streaming services, including Paramount+ and HBO Max, into a single platform. The company signed the $110 billion, or $31-per-share, deal for Warner Bros, after Netflix declined to raise its offer.
Together the companies already serve more than 200 million direct-to-consumer subscribers in more than 100 regions, Ellison said, giving them the scale and firepower to better compete in a market dominated by Netflix.
The acquisition is expected to save more than $6 billion in costs, with a big share coming from "non-labor sources" by clubbing streaming technology stacks and cloud providers of the companies, among others, Paramount strategy chief Andy Gordon said.
The savings target is much higher than Netflix's promised synergy goal of as much as $3 billion and had sparked fears of layoffs and shrinking of TV and film production by the combined Warner-Paramount.
The merger will also unite Paramount's CBS, MTV, Comedy Central and BET with Warner's networks including CNN, TNT, and Food Network.
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